NBCUniversal
Peacock, the entertainment streaming service of Comcast NBCUniversal, grew its second-quarter revenue and narrowed its loss to $348 million from $651 million last year, and $639 million in the third quarter. before 2024. million paying subscribers, compared to 33.5 million as of the end of March, the company also said on Tuesday. But it generated profits more than last year’s figure of 24 million.
“Peacock’s revenue increased 28 percent to $1.0 billion” in the latest quarter, the company also said, suggesting “the best year-over-year improvement in earnings ever.” adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for any quarter beginning in 2020.”
While the distribution profit, which until now has not been available for many giants of the industry, has been focused on Wall Street, Peacock previously posted a full year loss of 2023 of $ 2.75 billion. But Comcast CFO Jason Armstrong earlier this year emphasized that “2023 marked the peak of annual losses for Peacock, and for 2024 we expect to show strong improvements in losses, against 2023.”
During a morning conference call, Comcast president Mike Cavanagh answered a question from an analyst about when Peacock might turn a profit, but without being precise. “I don’t really look at Peacock independently. I mean, it’s an interesting exercise and I’m happy to share Peacock’s loss figures as we build it,” he argued.
Cavanagh added that Peacock is becoming more compatible with Comcast’s TV assets. “We’ve been thinking about it for years. I’m very confident that what we’re doing around Peacock in the media business, working together, will put us on the path to improvement that business. This is a year where we see Peacock’s growth offset the decline of our other businesses, and that’s a trend I expect to continue,” he said.
Peacock recently revealed a price increase that will take effect on July 18 for new customers and Aug. 17 for those who are already there. The opening ceremony of the Paris Olympics is scheduled for July 26.
In its quarterly earnings report on Tuesday, Comcast, led by chairman and CEO Brian Roberts, also revealed that adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) varied significantly for the segments. various of NBCU. Peacock’s losses are presented as part of NBCU’s news division.
Comcast’s Roberts during a morning analyst call spilled the beans on a press conference dealing with expensive telecommunications and acquisitions during the current industry consolidation. “Instead of participating in the acquisition of content companies, we are focusing more on natural opportunities such as the NBA, one of the most desirable sports in the world, which will help us grow growth in the future,” he said. .
During the morning call, Cavanagh revealed that his company has an 11-year TV rights deal with the NBA, which includes exclusive games for the Peacock to drive new subscribers and retain existing ones. they are already on the continuous streaming platform. “Peacock’s long-term goal is to have a balanced service across sports, entertainment and news,” Cavanagh told analysts.
“Opportunities like this rarely come along when there are long-term relationships worth pursuing,” Comcast CEO Roberts added during a morning call about the NBA’s deal with sports news to land on TV. NBCUniversal and streaming channels. “There’s going to be a lot of content on NBC, but a lot of content on Peacock and that allows for the trends we’re seeing in viewing behavior,” he added as TV viewers shift to streaming platforms. spread across the industry.
Meanwhile, Comcast’s core cable and telecom business also lost pay-TV and broadband subscribers in the second quarter. The company lost 120,000 broadband users in the latest period, from a drop of 19,000 in the second quarter of 2023. But the loss of video subscribers decreased from 543,000 to 419,000.
Comcast Cable CEO Dave Watson told analysts that the video business is being integrated with broadband offerings to continue to reduce subscriber losses this year, compared to 2023. on a case-by-case basis,” he told critics.
Second-quarter revenue for the company’s media unit increased 2.1 percent to $6.3 billion “due to higher domestic distribution and international network revenue, offset by the bottom line is lower advertising and local advertising revenue,” the company said. Domestic distribution revenue, up 5.7 percent, was boosted by Peacock’s higher revenue, “driven by an increase in paid subscribers compared to the first period.” But local broadcast revenue fell 1.7 percent, “primarily due to lower revenue at our network, partially offset by increased Peacock revenue.”
Adjusted EBITDA in the media division increased 9.0 percent to $1.4 billion due to higher revenue and flat operating expenses. “Fixed operating expenses were primarily due to a decrease in marketing and promotion expenses and programming and production expenses, which were primarily due to an increase in other expenses, each primarily related to Peacock ,” the company said.
Second-quarter revenue in the studio division fell 27.0 percent to $2.3 billion, “primarily due to lower revenue from games and content licensing,” which fell 74.1 percent and 5.9 respectively. The box office took a hit compared to “higher revenue from the volume and strength of sports releases last year, including. Super Mario Bros. Movie and Quick X,” the company said. “The content license fee has decreased mainly because of the time the content was made available by our television stations.”
Adjusted EBITDA for Studios fell 51.4 percent to $124 million due to lower revenue, which was offset by lower operating expenses. “The decrease in operating costs mainly reflected lower programming and production costs, mainly due to lower costs associated with the release of games,” said the firm.
Finally, second-quarter revenue in its parks division fell 10.6 percent to $2 billion. Comcast’s Cavanagh in a morning analyst call brought up the parks sector, despite low visitor numbers and revenue at local sites. “While the parks results are below our initial expectations for the year, we still consider the parks to be a great long-term business for us,” he argued.
Adjusted EBITDA for the theme parks business fell 24.1 percent to $632 million, “reflecting lower revenue, which outweighed lower operating costs.”
Shares of Comcast fell $1.01, or 2.5 percent, to $38.52 in early market trading Tuesday as investors digested the company’s latest financial results.
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